UK First-Time Buyer Guide (Buying a House, Costs, 2026)

Deposit Requirements

The minimum deposit for a first-time buyer is typically 5% of the property price (a 95% Loan-to-Value mortgage). However, a 10% deposit gives access to significantly better interest rates — the difference between a 90% LTV mortgage and a 95% LTV mortgage can be 1-2% in interest rate, saving thousands of pounds over the term. A 15-20% deposit unlocks the best deals. With average first-time buyer deposits around £54,000, saving enough is a major challenge.

The Lifetime ISA (LISA) is the best savings vehicle for a first home. You can save up to £4,000 per year and the government adds a 25% bonus (up to £1,000 per year). The money must be used for a first home purchase (up to £450,000) or retirement. The Help to Buy ISA is now closed to new accounts but existing holders can continue saving until November 2029. Many first-time buyers receive help from family — gifted deposits from parents are common. Lenders typically require a signed letter confirming the gift is not a loan.

Mortgage Types for First-Time Buyers

Fixed-rate mortgages are the most popular choice — your interest rate is locked for 2, 3, 5, or 10 years. This gives certainty on monthly payments and protection from rate rises. Tracker mortgages follow the Bank of England base rate plus a set margin — they can be cheaper initially but payments rise if rates increase. Offset mortgages link your savings to your mortgage, reducing the interest you pay. Guarantor mortgages use a family member's income or savings as additional security — useful if you have a small deposit.

Joint Borrower Sole Proprietor (JBSP) mortgages allow up to four people to jointly borrow but only one or two to own the property — parents can help without paying Stamp Duty. Shared Ownership lets you buy a 25-75% share of a property and pay rent on the remainder. Help to Buy equity loans are no longer available in England (closed March 2023), but similar schemes exist in Scotland and Wales. See our Mortgage Guide for more detail on rates and affordability.

Buying Costs

Beyond the deposit, first-time buyers need to budget for: solicitor or conveyancer fees £1,000-£2,000; property surveys (homebuyer report £300-£500, building survey £600-£1,500); mortgage arrangement fees £0-£2,000 (often added to the loan, but you pay interest); valuation fee (often free with the mortgage); Stamp Duty Land Tax — first-time buyer relief means 0% up to £425,000 (on properties up to £625,000), then 5% on the portion from £425,001 to £625,000; properties over £625,000 get no relief; moving costs £500-£2,000; and initial furniture and renovations.

Leasehold properties come with additional costs: ground rent (typically £100-£500 per year), service charges (£1,000-£5,000+ per year for flats), and potentially a share of freehold costs. Always budget for the full costs of moving, including buildings insurance from exchange of contracts, life insurance, and contents insurance for your new home. A contingency of 5-10% of the purchase price for unexpected costs is wise.

Government Schemes

The Lifetime ISA gives a 25% government bonus on savings up to £4,000 per year. You must have the account open for at least 12 months before using it for a house purchase, and the maximum purchase price is £450,000. Both first-time buyers can use their LISAs towards the same property — combining two LISA bonuses of up to £1,000 each per year. Shared Ownership allows you to buy a share (typically 25-75%) of a property and pay rent on the rest. You can "staircase" to 100% ownership over time. Staircasing is usually in 10% increments.

First Homes are a scheme offering new-build homes at a 30% discount to local first-time buyers, with the discount retained in perpetuity for future buyers. You must have a household income under £80,000 (£90,000 in London) and meet local connection criteria. The discount reduces the price but also limits your potential equity growth. Right to Buy is available for council tenants — you can buy your council home at a discount of up to £96,010 (£127,940 in London) depending on how long you have been a tenant.

New-Build vs Existing Property

A major decision for first-time buyers is whether to buy a new-build home or an existing property. New-build homes are typically more energy-efficient (higher EPC ratings, lower heating bills), come with the remainder of the NHBC 10-year warranty, and often require no immediate repairs. Developers may offer incentives — help with legal fees, free upgrades, or "Part Exchange" (buying your existing home to facilitate the purchase). However, new-builds are priced at a premium (typically 10-20% above comparable existing homes) and may have issues with snagging (minor defects), estate management charges (annual fees for maintaining communal areas, not always disclosed upfront), and limited negotiation on price.

Existing properties are generally cheaper per square foot, offer more character and established neighbourhoods, and have no estate management charges (unless leasehold). You can negotiate the price, and the property has a known history (previous sales data, EPC records, potential structural issues can be identified through surveys). However, existing homes often need repairs, modernisation, or improvements — budget accordingly for the first few years. The choice between new-build and existing depends on your priorities: a turnkey move with higher upfront cost (new-build) or a more affordable property with potential for value-add through improvements (existing). Both can be excellent first homes — choose based on your budget, timeline, and willingness to manage renovation projects.

Mortgage Approval Process

Step 1: Get an Agreement in Principle (AIP) — a lender says how much they might lend you based on initial information. This is not a binding offer but shows sellers you are serious. Step 2: Find a property and make an offer. Step 3: Full mortgage application — the lender checks your income, outgoings, credit history, and the property value. Step 4: Mortgage offer — usually valid for 6 months. Step 5: Conveyancing — solicitor searches local authority, water, drainage, environmental records, and land registry. Step 6: Exchange of contracts — you are now legally committed. Step 7: Completion — you get the keys.

The process typically takes 8-12 weeks from offer to completion. Delays are common — slow solicitors, complex searches, mortgage processing backlogs, and chain issues. If you are buying a new-build, allow more time. Use a mortgage broker to compare deals across the whole market — they can access deals not available directly and guide you through the process. Most brokers are free to first-time buyers (paid by the lender) or charge a small fee.

Hidden Costs to Budget

Many first-time buyers focus on the deposit and forget the other costs: buildings insurance (required from exchange of contracts, not completion), life insurance (to protect your mortgage), contents insurance, ground rent and service charges (leasehold), Stamp Duty Land Tax (even with FTB relief above £625,000), moving costs (vans, removal companies, packing materials), immediate renovations and furnishings (curtains, white goods, basic furniture), higher utility bills than your rented property (homes are often larger), and a contingency fund (5-10% of the purchase price).

Budget at least £5,000-£10,000 for non-deposit costs. If you are buying with a partner, make sure both budgets are aligned. Keep some cash back after completion for the first few months — your mortgage and bills will likely be higher than your previous rent, and unexpected repairs always happen. A thorough pre-purchase survey (building survey recommended for older properties) can identify major issues before you commit.

Making an Offer and Negotiating

Once you have found your ideal property, making a competitive offer is both an art and a science. Research recent sold prices for similar properties in the area using online portals like Zoopla, Rightmove, and the Land Registry. Your mortgage agreement in principle (AIP) gives you credibility with estate agents and vendors. An offer below the asking price is normal in many markets, but in competitive areas or for desirable properties, you may need to offer the asking price or above. Always make your offer subject to mortgage, survey, and conveyancing — this protects you if issues arise.

Once your offer is accepted, the property is "sold subject to contract" (SSTC). In England and Wales, this is not legally binding until contracts are exchanged — gazumping (where a seller accepts a higher offer from someone else after agreeing with you) is legal, though unethical. To minimise the risk, move quickly through the mortgage and conveyancing process. In Scotland, the system is different — offers are formal and binding once accepted, and the "home report" must be provided by the seller. Understanding the process in your region is essential before making an offer. Once you exchange contracts, you are legally committed — you will pay a deposit (usually 10%) and if you pull out, you lose it.

Moving In and First-Year Costs

Completion day is when you get the keys. Before moving in, arrange buildings insurance (required from exchange of contracts), change the utilities into your name, register for council tax, and redirect your post. Your first year of homeownership will involve significant spending: initial furnishing and decorating, minor repairs and improvements, setting up a home maintenance fund, and adjusting to higher monthly outgoings (mortgage, building insurance, life insurance, ground rent, service charges). Many first-time buyers underestimate the ongoing costs of maintaining a home — budget at least 1% of the property value per year for maintenance and repairs.

Get to know your property thoroughly: locate the stopcock (main water shut-off), fuse box (consumer unit), boiler and heating controls, and any meters. For leasehold properties, understand your lease terms — ground rent review periods, service charge accounts, and any restrictions on alterations or pets. Build a relationship with local tradespeople (plumber, electrician, handyperson) before you need them in an emergency. Consider a home emergency insurance policy (typically £200-£300 per year) for cover against boiler breakdown, plumbing emergencies, and electrical failures. Most importantly, enjoy your new home — becoming a homeowner is a significant achievement and the start of building property wealth over the long term.

FAQs

What deposit do I need as a first-time buyer?

Minimum 5% for some mortgages. 10% is recommended for better rates. Average first-time buyer deposit is about £54,000 in 2026.

What is the Lifetime ISA and how does it help?

Save up to £4,000/year, government adds 25% bonus (up to £1,000/year). Use the money for a first home (up to £450,000) or retirement. Account must be open 12+ months before buying.

Do first-time buyers pay Stamp Duty?

First-time buyer relief means 0% SDLT on properties up to £425,000. 5% on the portion from £425,001 to £625,000. Properties over £625,000 get no relief.

How long does buying a house take?

Typically 8-12 weeks from offer to completion. New-builds can take longer. Delays from solicitors, searches, mortgage processing, and chain issues are common.

What is Shared Ownership?

Buy a share (25-75%) of a property and pay rent on the remainder. You can "staircase" to 100% over time. Available through housing associations.